
Management's Discussion and Analysis of
Financial Condition and Results of Operations
S&T Bancorp, Inc. and Subsidiaries

Financial Condition
The $123.5 million growth of average earning assets in 1999 was primarily the
result of an excellent lending year for S&T Bancorp, Inc. (S&T), combined
with increases in the investment portfolio. During 1999, average loan
balances increased by $106.9 million, and average securities and federal
funds increased $16.6 million. The funding for this loan and security growth
was provided by a $71.1 million increase in average deposits, a $65.8 million
increase in average borrowings offset by a decrease of $5.6 million in
average earnings retained.
[CAPTION]
<TABLE>

                                       1999               1998
                               Average     Loan     Average    Loan
                                 Loan    Balance     Loan     Balance
(in millions)                  Balance  Percentage  Balance  Percentage
<S>                            <C>          <C>    <C>          <C>
Commercial, mortgage and
  industrial                  $  841.6      59%    $  691.6     53%
Residential real estate
  mortgage                       472.9      33        502.1     38
Installment                      107.4       8        121.3      9
Total Loans                   $1,421.9     100%    $1,315.0    100%
</TABLE>

Lending Activity
Average loans at December 31, 1999 were $1.4 billion, a $106.9 million or
8.1% increase from December 31, 1998. The increases in average loans for 1998
were $80.3 million. Changes in the composition of the average loan portfolio
during 1999 included increases of $150.0 million of commercial loans and
$22.8 million of home equity loans, offset by decreases of $52.0 million of
residential mortgages and $13.9 million in installment loans. Composition
changes included decreases from the effects of $16.1 million of 1-4 family
mortgage loans and $4.5 million of commercial loans that were sold or
participated in 1999.

Average commercial, mortgage and industrial loans currently comprise 59% of
the loan portfolio. Although commercial loans can be an area of higher risk,
management believes these risks are mitigated by limiting the percentage
amount of portfolio composition, a rigorous underwriting review by loan
administration and the fact that many of the commercial real estate loans are
owner occupied.

Residential mortgage lending continued to be a strategic focus for 1999
through the establishment of a centralized mortgage origination department,
product redesign, secondary market activities and the utilization of
commission compensated originators. Management believes that if a downturn in
the local residential real estate market occurs, the impact of declining
values on the real estate loan portfolio will be negligible because of S&T's
conservative mortgage lending policies for portfolio loans which generally
require a maximum term of 20 years for fixed rate mortgages, a maximum term
of 30 years for adjustable rate mortgages and private mortgage insurance for
loans with less than a 20% down payment. Adjustable rate mortgages with
repricing terms of one, three and five years comprised 19% of the residential
mortgage portfolio in 1999.

Much of the decline in average residential loans was due to more active
participation in the secondary mortgage markets. S&T periodically sells
longer-term, lower yielding 1-4 family mortgages to the Federal National
Mortgage Association (Fannie Mae). The rationale for these sales is to
mitigate interest rate risk associated with holding long-term residential
mortgages in the loan portfolio, to generate fee revenue from servicing, and
still maintain the primary customer relationship. During 1999, S&T sold $16.1
million of 1-4 family mortgages to Fannie Mae. Fees and gains from mortgage
servicing activities were $0.4 million in 1999. S&T will continue to sell
longer-term loans to Fannie Mae in the future on a selective basis,
especially during periods of lower interest rates.

Installment loan decreases were primarily associated with significantly lower
volumes in the indirect auto loan category and S&T's strategy to continue to
focus resources toward originations of direct installment loans and home
equity loans. Pricing pressures were unusually intense in the indirect market
during 1999 and 1998, and the decision was made to exit this line of business
and allow the portfolio to amortize through normal payments and payoffs.
Direct loans and home equity loans increased $29.2 million during 1999 as
compared to the 1998 full year average.

PAGE  21

Loan underwriting standards for S&T are established by a formal policy
administered by the S&T Bank Credit Administration Department, and are
subject to the periodic review and approval of the S&T Bank Board of
Directors.

Rates and terms for commercial real estate and equipment loans normally are
negotiated, subject to such variables as economic conditions, marketability
of collateral, credit history of the borrower and future cash flows. The loan
to value policy guideline for commercial real estate loans is generally 75%-
80%.

The residential, first lien, mortgage loan to value policy guideline is 80%.
Higher loan to value loans can be approved with the appropriate private
mortgage insurance coverage. Second lien positions are sometimes incurred
with home equity loans, but normally only to the extent that the  combined
credit exposure for both first and second liens does not exceed 100% loan to
value.

A variety of unsecured and secured installment loan and credit card products
is offered by S&T. However, the majority of the consumer loan portfolio is
automobile loans. Loan to value guidelines for direct loans are 90%-100% of
invoice for new automobiles and 80%-90% of National Automobile Dealer
Association (NADA) value for used automobiles.

Management intends to continue to pursue quality loans in all lending
categories within our market area in order to honor our commitment to provide
comprehensive financial services to our customers. S&T's loan portfolio
primarily represents loans to businesses and consumers in our market area of
western Pennsylvania rather than to borrowers in other areas of the country
or to borrowers in other nations. S&T has not concentrated its lending
activities in any industry or group. During the past several years,
management has concentrated on building an effective credit and loan
administration staff which assists management in evaluating loans before they
are made and identifies problem loans early.

Security Activity
Average securities increased $11.5 million in 1999 and $83.8 million in 1998.
During 1999, S&T's bond portfolio was restructured with sales and maturities
of $238.7 million of U.S. government agency securities. The proceeds were
reinvested in order to extend potential call dates and to take advantage of
higher interest rates. The 1998 increase is due to increasing the investment
portfolio to maximize net interest income by taking advantage of low, short-
term funding rates and investing in U.S. government agency securities,
classified as available for sale. Interest rate risk associated with these
strategies is managed and monitored through S&T's Asset Liability Committee
(ALCO).

The largest components of the 1999 increase included $38.6 million in other
corporate securities, $12.2 million in corporate equities and $7.0 million in
Federal Home Loan Bank (FHLB) stock. The FHLB stock is a membership and
borrowing requirement. Offsetting these increases are decreases of $10.8
million in U.S. treasury securities, $20.0 million of U.S. government agency
securities, $4.1 million in mortgage-backed securities and $11.4 million in
tax-exempt state and municipal securities.

During 1999, S&T sold $13.8 million of equity securities classified as
available for sale. The sales were made in order to maximize returns when
market opportunities are presented. Additionally, S&T may receive an exchange
of shares relative to mergers; gains and losses are recognized on shares held
of acquired institutions in accordance with Emerging Issues Task Force #91-5,
Nonmonetary Exchange of Cost-Method Investments (EITF 91-5). The equity
securities portfolio is primarily comprised of bank holding companies, as
well as preferred and utility stocks to take advantage of the dividends
received deduction for corporations. During 1999, the equity portfolio
yielded 9.3% on a fully taxable equivalent basis and had unrealized gains at
December 31, 1999, net of unrealized losses, of $36.1 million.

S&T's policy for security classification includes U.S. treasuries, U.S.
government agencies, mortgage-backed securities, corporate debt securities
and marketable equity securities as available for sale. Municipal securities
and one corporate debt security are classified as held to maturity. At
December 31, 1999, unrealized gains, net of unrealized losses, for securities
classified as available for sale were approximately $25.2 million.

PAGE  22

Nonearning Assets
Average noninterest earning assets increased $21.6 million in 1999 and $5.8
million in 1998. The 1999 increase can be primarily attributed to a $25.0
million bank-owned life insurance (BOLI) investment entered into during 1999,
which provides S&T with other income through increases in the cash surrender
value of the BOLI. The 1998 increase can be primarily attributed to an
increase in cash and due from banks and in accrued interest receivable on a
higher earning asset balance. Cash and due from banks growth is primarily
related to increased federal reserve requirements and check clearing balances
resulting from demand deposit growth and higher levels of cash management
activities for customers.
[CAPTION]
<TABLE>

                                     1999                    1998
                                         Loan                    Loan
                             Allowance  Balance    Allowance    Balance
Allowance for Loan Losses     Balance  Percentage   Balance    Percentage
(in millions)

<S>                             <C>        <C>       <C>         <C>
Commercial, mortgage and
  industrial                    $20.1      59%       $16.9         53%
Residential real estate mortgage  0.9      33          1.1         38
Installment                       2.5       8          2.6          9
Unallocated                       3.6       -          6.1          -
 Total                          $27.1     100%       $26.7        100%
</TABLE>

Allowance for Loan Losses
The year-end balance in the allowance for loan losses increased to $27.1
million or 1.81% of total loans at December 31, 1999 as compared to $26.7
million or 1.95% of total loans at December 31, 1998.

The adequacy of the allowance for loan losses is determined by management
through evaluation of the loss potential on individual nonperforming,
delinquent and high-dollar loans; review of economic conditions and business
trends; historical loss experience; and growth and composition of the loan
portfolio, as well as other relevant factors.

A quantitative analysis is utilized to support the adequacy of the allowance
for loan losses. This analysis includes review of the high and low historical
charge-off rates for loan categories, fluctuations and trends in the amount
of classified loans and economic factors. Economic factors consider the level
of S&T's historical charge-offs that have occurred within the credit's
economic life cycle.

Significant to this analysis is the shift in loan portfolio composition to an
increased mix of commercial loans. These loans are generally larger in size,
and due to our continuing growth, many are not well seasoned. Management
relies on its risk rating process to monitor trends which may be occurring
relative to commercial loans to assess potential weaknesses within the
credit. Current economic factors and trends in risk ratings are considered in
the determination of the allowance for loan losses.

Net loan charge-offs totaled $3.5 million in 1999. The balance of
nonperforming loans, which includes nonaccrual loans past due 90 days or
more, at December 31, 1999, was $3.0 million or 0.20% of total loans. This
compares to nonperforming loans of $2.9 million or 0.21% of total loans at
December 31, 1998.

Asset quality is a major corporate objective at S&T, and management believes
the total allowance for loan losses is adequate to absorb probable loan
losses.

Deposits
Average total deposits increased by $71.1 million in 1999 and $57.2 million
in 1998. The mix of average deposits in 1999 changed with money market
accounts and interest-bearing demand deposits increasing $57.4 million and
$8.6 million, respectively, while time deposits and savings accounts
decreased $16.5 and $5.1 million, respectively. Noninterest-bearing deposits
increased by $26.7 million or 15% in 1999 and were approximately 15% and 14%
of total deposits during 1999 and 1998, respectively. Some of the changes can
be partially explained by strategic initiatives to increase demand accounts
and cash management services. In addition, a new, successful strategy for
money market account pricing was implemented in order to make these accounts
more competitive with money funds offered at brokerage firms.

PAGE  23

Management believes the S&T deposit base is stable and S&T has the ability to
attract new deposits, mitigating a funding dependency on volatile
liabilities. Special rate deposits of $100,000 and over were 6% and 7% of
total deposits during 1999 and 1998, respectively, and primarily represent
deposit relationships with local customers in our market area. In addition,
S&T has the ability to access both public and private markets to raise long-
term funding if necessary. During 1995, S&T issued $25.0 million of retail
certificates of deposit through two brokerage firms, further broadening the
availability of reasonably priced funding sources. At December 31, 1999,
there were $11.5 million of these brokered retail certificates of deposit
outstanding.

Borrowings
Average borrowings increased $65.8 million in 1999 and were comprised of
securities sold under repurchase agreements (REPOS), federal funds purchased
and long-term borrowings at the FHLB. S&T defines REPOS with its retail
customers as retail REPOS; wholesale REPOS are those transacted with other
banks and brokerage firms with terms normally ranging from one to 14 days.

The average balance in retail REPOS decreased slightly by $0.1 million for
1999 and increased $9.1 million for 1998. The 1998 increase is primarily
attributable to new REPO sweep relationships in our Cash Management
Department. S&T views retail REPOS as a relatively stable source of funds
since most of these accounts are with local, long-term customers.

Wholesale REPOS and federal funds purchased averaged $52.1 million in 1999, a
decrease of $35.0 million from the 1998 averages. The increase in core
deposits and the availability of reasonably priced long-term borrowings from
the FHLB decreased the usage of these types of fundings in 1999.

The interest rate risk of various funding strategies is managed through ALCO.
During 1999, ALCO authorized four additional long-term borrowings of $155.0
million at a fixed rate with the FHLB. At December 31, 1999, S&T had long-
term borrowings outstanding of $215.6 million at a fixed rate and $69.6
million at an adjustable rate with the FHLB. The purpose of these borrowings
was to provide matched fundings for newly originated loans, to mitigate the
risk associated with volatile liability fundings, to take advantage of lower
cost funds through the FHLB's Community Investment Program and to fund stock
buy-backs.

Another ALCO strategy used to manage interest rate risk is the use of
interest rate swaps. At December 31, 1999, S&T had notional values totaling
$10.0 million in interest rate swaps. S&T pays a fixed rate of 5.3% on these
instruments and receives a variable rate based upon the London Interbank
Offer Rate. The purpose of these off-balance sheet arrangements is to lock-in
funding costs of fixed rate loans.

Trust Assets
The year-end market value balance of the S&T Bank Trust Department assets,
which are not accounted for as part of the assets of S&T, decreased 1% in
1999 and increased 12% in 1998. The 1999 decrease was a result of general
decreases in the debt and equity markets during the year.

Results of Operations

Year Ended December 31, 1999

Net Income
Net income was a record $41.4 million or $1.51 per diluted earnings per share
in 1999, representing a 12% increase from the $38.0 million or $1.35 per
diluted earnings per share in 1998. The return on average assets increased to
1.95% for 1999, as compared to 1.90% for 1998. The return on average equity
increased to 16.50% for 1999, compared to 14.80% for 1998. Increases to the
net interest margin and other revenue contributed significantly to this
enhanced earnings performance.

Net Interest Income
On a fully taxable equivalent basis, net interest income increased $4.6
million or 5% for 1999 compared to 1998. The net yield on interest-earning
assets decreased slightly to 4.55% in 1999 as compared to 4.61% in 1998. The
decline in the net yield on interest-earning assets during 1999 was primarily
attributed to the implementation of a bank-owned life insurance program
(BOLI), as well as our continuing share repurchase program that repurchased
approximately 834,000 shares of S&T common stock. Net interest income was
positively affected by the $123.5 million or 7% increase in average earning
assets.

PAGE  24

In 1999, average loans increased $106.9 million and average securities
increased $11.5 million, comprising most of the earning asset growth. The
yields on average loans decreased by 28 basis points and the yields on
average securities decreased 12 basis points. Overall funding costs decreased
47 basis points.

Average interest-bearing deposits provided $71.1 million of the funds for the
growth in average earning assets, at a cost of 3.98% in 1999 as compared to
4.34% in 1998.

Average increases of $65.8 million in REPOS and other borrowed funds provided
additional funding. The cost of these funds decreased 11 basis points during
1999. During 1999, more longer-term borrowings were utilized in order to
mitigate interest rate risk.

Also positively affecting net interest income was a $13.3 million increase to
average net free funds. Average net free funds are the excess of demand
deposits, other noninterest-bearing liabilities and shareholders' equity over
nonearning assets.

Maintaining consistent spreads between earning assets and costing liabilities
is very significant to S&T's financial performance since net interest income
comprised 84% of operating revenue. The level and mix of earning assets and
funds are continually monitored by ALCO in order to mitigate the interest
rate sensitivity and liquidity risks of the balance sheet. A variety of
asset/liability management strategies was successfully implemented, within
prescribed ALCO risk parameters, that enabled S&T to maintain a net interest
margin consistent with historical levels.

Provision for Loan Losses
The provision for loan losses is an amount added to the allowance against
which loan losses are charged. The provision for loan losses was $4.0 million
for 1999 compared to $10.6 million in 1998. The provision expense is the
result of management's assessment of economic conditions, credit quality
statistics, loan administration effectiveness and other factors that would
have an impact on probable losses in the loan portfolio, as determined by the
model for the adequacy of the allowance for loan losses.

Credit quality statistics are an important factor in determining the amount
of provision expense. Net loan charge-offs totaled $3.5 million for 1999
compared to $4.3 million for 1998. Included in the charge-offs for 1998 is
$2.0 million related to a floor plan loan to one automobile dealership.
Nonperforming loans to total loans decreased to 0.20% at December 31, 1999.
Also affecting the amount of provision expense is loan growth and portfolio
composition. Most of the loan growth in 1999 and 1998 is attributable to
larger-sized commercial loans.

Noninterest Income
Noninterest income, excluding net security gains, increased $3.2 million or
23% in 1999 compared to 1998. Increases included $0.3 million or 8% in trust
income, $0.7 million or 12% in service charges and fees and a $2.2 million or
49% increase in other income. Security gains decreased $7.5 million or 70%.

The increase in trust income was attributable to bankwide incentive programs
and expanded marketing efforts designed to develop new trust business and to
develop new relationships within the Allegheny County market.

The increase in service charges on deposit accounts was primarily the result
of management's continued effort to implement reasonable fees for services
performed and to manage closely the collection of these fees, as well as
expanding new cash management relationships.

The increase in other income was a result of increased performance for
brokerage and insurance commissions, letters of credit fees, covered calls,
credit and debit card commissions, mortgage servicing income, as well as BOLI
investment income. These areas were the focus of several 1999 strategic
initiatives and product enhancements implemented in order to expand this
source of revenue.

S&T recognized $5.7 million of gains on equity securities during 1999. $1.3
million was the result of Emerging Issues Task Force #91-5, Nonmonetary
Exchange of Cost-Method Investments (EITF 91-5). This accounting
pronouncement requires the mark to market of equity securities when an
acquisition of the company in which securities are owned occurs. EITF 91-5
gains recognized included $0.7 million from the First Western Bancorp/Sky
Financial merger and $0.6 million from the BankBoston/Fleet Boston merger.
The remaining security gains were primarily attributable to the sales of
equity securities in order to maximize returns by taking advantage of market
opportunities when presented. Offsetting these gains were $2.5 million in
losses from the aforementioned restructuring of the available for sale bond
portfolio.

PAGE  25

Noninterest Expense
Noninterest expense increased $1.5 million or 4% in 1999 compared to 1998.
The increase is primarily attributable to increased employment and other
expenses. S&T's efficiency ratio, which measures noninterest expense as a
percent of recurring noninterest income plus net interest income on a fully
taxable equivalent basis, was 41% and 42% in 1999 and 1998, respectively.

Staff expense increased 3% or $0.6 million in 1999. The increase resulted
from normal merit increases and higher incentive payouts relative to
commercial loan activity and credit insurance sales. Average full-time
equivalent staff was 659 in 1999 and 1998.

Other expenses increased 10% or $1.2 million as compared to 1998. This
increase included $0.3 million of goodwill related to a branch purchase in
the third quarter of 1998, $0.3 million in telephone expense relating to the
implementation of a wide area computer communications network and a $0.3
million recovery of a previously charged-off fraud loss in 1998. Other
expense increases of $0.3 million were not significant and reflect normal
changes due to activity increases, organization expansion, consulting
engagements for our fee products and operations areas and fee increases from
vendors.

Federal Income Taxes
Federal income tax expense increased $1.8 million to $18.0 million in 1999 as
a result of higher pretax income in 1999. The 1999 effective tax rate of 30%
was below the 35% statutory tax rate due to the tax benefits resulting from
tax-exempt interest, excludable dividend income and the tax benefits
associated with Low Income Housing Tax Credit (LIHTC) projects. S&T currently
does not incur any alternative minimum tax.

Results of Operations

Year Ended December 31, 1998

Net Income
Net income was $38.0 million or $1.35 per diluted earnings per share in 1998,
representing a 15% increase from the $33.4 million or $1.17 per diluted
earnings per share in 1997. The return on average assets increased to 1.90%
for 1998, as compared to 1.84% for 1997. The return on average equity
increased to 14.80% for 1998, compared to 13.71% for 1997. Increases to the
net interest margin and other revenue contributed significantly to this
enhanced earnings performance.

Net Interest Income
On a fully taxable equivalent basis, net interest income increased $3.2
million or 4% for 1998 compared to 1997. The net yield on interest-earning
assets decreased to 4.61% in 1998 as compared to 4.85% in 1997. The decline
in the net yield on interest-earning assets during 1998 was primarily
attributed to the balance sheet growth with securities, as well as the
Modified Dutch Tender Offer earlier this year that repurchased approximately
880,000 shares of S&T common stock. Net interest income was positively
affected by $160.2 million or a 9% increase in average earning assets. In
1998, average loans increased $80.3 million and average securities increased
$83.8 million, comprising most of the earning asset growth. The yields on
average loans increased by seven basis points and the yields on average
securities declined by 30 basis points.

Average interest-bearing deposits provided $57.2 million of the funds for the
growth in average earning assets, at a cost of 4.34% in 1998 as compared to
4.33% in 1997.

Average increases of $106.7 million in REPOS and other borrowed funds
provided additional funding. The cost of these funds decreased 15 basis
points during 1998. During 1998, more longer-term borrowings were utilized in
order to mitigate interest rate risk.

Also positively affecting net interest income was  a $19.8 million increase
to average net free funds. Average net free funds are the excess of demand
deposits, other noninterest-bearing liabilities and shareholders' equity over
nonearning assets.

Maintaining consistent spreads between earning assets and costing liabilities
is very significant to S&T's financial performance since net interest income
comprised 86% of operating revenue. The level and mix of earning assets and
funds are continually monitored by ALCO in order to mitigate the interest
rate sensitivity and liquidity risks of the balance sheet. A variety of
asset/liability management strategies was successfully implemented, within
prescribed ALCO risk parameters, that enabled S&T to maintain a net interest
margin consistent with historical levels.

PAGE  26

Provision for Loan Losses
The provision for loan losses is an amount added to the allowance against
which loan losses are charged. The provision for loan losses was $10.6
million for 1998 compared to $5.0 million in 1997. The provision expense and
the adequacy of the allowance for loan losses is determined based upon
management's assessment of economic conditions, credit quality statistics,
loan administration effectiveness and other factors that would have an impact
on probable losses in the loan portfolio. Also affecting the amount of
provision expense is loan growth, portfolio composition and trends within
risk ratings.

Credit quality statistics are an important factor in determining the amount
of provision expense. Net loan charge-offs totaled $4.3 million for 1998
compared to $3.3 million for 1997. Included in the charge-offs for 1998 is
$2.0 million related to a floor plan loan to one automobile dealership.
Nonperforming loans to total loans decreased to 0.21% at December 31, 1998.

Also affecting the amount of provision expense is loan growth and portfolio
composition. Most of the loan growth in 1998 is attributable to larger-sized
commercial loans.

Noninterest Income
Noninterest income increased $8.0 million or 49% in 1998 compared to 1997.
Increases included $0.5 million or 15% in trust income, $0.9 million or 21%
in service charges and fees, a $1.3 million or 40% increase in other income
and a $5.3 million or 97% increase in security gains.

The increase in trust income was attributable to bankwide incentive programs
and expanded marketing efforts designed to develop new trust business and to
develop new relationships within the Allegheny County market.

The increase in service charges on deposit accounts was primarily the result
of management's continued effort to implement reasonable fees for services
performed and to manage closely the collection of these fees, as well as the
implementation of foreign ATM convenience fees in the fourth quarter of 1997.

The increase in other income was a result of increased performance for
brokerage and insurance commissions, letters of credit fees, covered calls,
debit card commissions, mortgage servicing income, as well as $0.4 million of
nonrecurring gains recognized from oil and gas producing properties that were
sold during the third quarter of 1998. These areas were the focus of several
1998 strategic initiatives and product enhancements implemented in order to
expand this source of revenue.

S&T recognized $10.7 million of gains on equity securities during 1998. Gains
of $5.2 million were the result of EITF 91-5. This accounting pronouncement
requires the mark to market of equity securities when an acquisition of the
company in which securities are owned occurs. EITF 91-5 gains recognized
included $2.6 million from the First Union/ Corestates merger, $0.4 million
from the CFX/Peoples Heritage merger and $2.2 million from the First
Commonwealth/ Southwest merger. The remaining security gains were primarily
attributable to the sales of equity securities in order to maximize returns
by taking advantage of market opportunities when presented.

Noninterest Expense
Noninterest expense decreased $1.2 million or 3% in 1998 compared to 1997.
The decrease is primarily attributable to $2.2 million of merger-related and
other nonrecurring expenses associated with the acquisition of Peoples Bank
of Unity during 1997. Merger-related and other nonrecurring expenses included
costs for severance and early retirement programs, the write-off and
conversion of data processing systems, as well as legal, accounting and
investment banker expenses. Other expenses of $0.9 million were provided for
during 1998 and included $0.2 million of consulting fees for the redesigning
of retail loan delivery services, $0.3 million for Year 2000 projected costs
and $0.3 million of costs associated with the conversion of data processing
systems for a branch purchase.

Recurring expenses were relatively flat during 1998 as compared to 1997 and
reflect normal activity increases. Severance and early retirement programs
were implemented in May 1997 in order to eliminate duplicate positions
following post merger restructuring and consolidation of operations. Average
full-time equivalent staff decreased from 665 to 659 in 1998. S&T's
efficiency ratio, which measures noninterest expense as a percent of
recurring noninterest income plus net interest income on a fully taxable
equivalent basis, was 42% and 44% in 1998 and 1997, respectively.

Federal Income Taxes
Federal income tax expense increased $2.6 million to $16.2 million in 1998 as
a result of higher pretax income in 1998. The 1998 effective tax rate of 30%
was below the 35% statutory tax rate due to the tax benefits resulting from
tax-exempt interest, excludable dividend income and the tax benefits
associated with LIHTC projects. S&T currently does not incur any alternative
minimum tax.

PAGE  27

Liquidity and Interest Rate Sensitivity
Liquidity refers to the ability to satisfy the financial needs of depositors
who want to withdraw funds or borrowers needing access to funds to meet their
credit needs. Interest rate sensitivity management seeks to avoid fluctuating
net interest margins and to enhance net interest income through periods of
changing interest rates. ALCO is responsible for establishing and monitoring
the liquidity and interest rate sensitivity guidelines, procedures and
policies.

The principal sources of asset liquidity are cash and due from banks,
interest-earning deposits with banks, federal funds, investment securities
that mature in one year or less and the market value of securities available
for sale. At December 31, 1999, the total of such assets was approximately
$646.9 million or 29% of consolidated assets. However, liability liquidity is
much more difficult to quantify, but is further enhanced by a stable core
deposit base, access to credit lines at other financial institutions and
S&T's ability to renew maturing deposits. Certificates of deposit in
denominations of $100,000 or more represented 6% of deposits at December 31,
1999 and were outstanding primarily to local customers. S&T's ability to
attract deposits and borrowed funds depends primarily on continued rate
competitiveness, profitability, capitalization and overall financial
condition.

Beyond the issue of having sufficient sources to fund unexpected credit
demands or deposit withdrawals, liquidity management also is an important
factor in monitoring and managing interest rate sensitivity issues through
ALCO. Through forecast and simulation models, ALCO is also able to project
future funding needs and develop strategies for acquiring funds at a
reasonable cost.

ALCO uses a variety of measurements to monitor the liquidity position of S&T.
These include liquidity gap, net alternative funding resources, net loans to
assets, net loans to deposits, volatile liabilities and liquidity ratio. As
of December 31, 1999, all of these measurements were in compliance with ALCO
policy limitations.

Because the assets and liabilities of S&T are primarily monetary in nature,
the presentation and analysis of cash flows in formats prescribed by
Financial Accounting Standards Board Statement No. 95 "Statement of Cash
Flows" (Statement No. 95) are less meaningful for managing bank liquidity
than for other non-financial companies. Funds are typically provided from
current earnings, maturity and sales of securities available for sale, loan
repayments, deposits and borrowings. The primary uses of funds include new
loans, repayment of borrowings, the purchase of securities and dividends to
shareholders. The level and mix of sources and uses of funds are constantly
monitored and adjusted by ALCO in order to maintain credit, liquidity and
interest rate risks within prescribed policy guidelines while maximizing
earnings.

ALCO monitors and manages interest rate sensitivity through gap, simulation
and duration analyses in order to avoid unacceptable earnings fluctuations
due to interest rate changes. S&T's gap model includes certain management
assumptions based upon past experience and the expected behavior of customers
during various interest rate scenarios. The assumptions include principal
prepayments for mortgages, installment loans and CMOs, and classifying the
demand, savings and money market balances by degree of interest rate
sensitivity. Utilizing the above assumptions results in ratios of interest
rate sensitive assets to interest rate sensitive liabilities for the six-
month and 12-month intervals ended December 31, 1999 of 0.92% and 0.91%,
respectively. Assuming immediate repricings for interest-bearing demand,
savings and money market accounts, these ratios would be 0.69% and 0.74%,
respectively.

In addition to the gap analysis, S&T performs an earnings sensitivity
analysis to identify more dynamic interest rate risk exposures.

An earnings simulation model is used to estimate the effect that specific
interest rate changes would have on 12 months of pretax earnings. Derivative
financial instruments are included in this exercise. The model incorporates
management assumptions regarding the level of interest rate or balance
changes on indeterminate maturity deposit products (savings, money market,
NOW and demand deposits) for a given level of market rate changes. These
assumptions have been developed through a combination of historical analysis
and future expected pricing behavior. Interest rate caps and floors on all
products are included to the extent that they become effective in the 12-
month simulation period. Additionally, changes in prepayment behavior of the
residential mortgage portfolio in each rate environment are captured using
management estimates. Finally, the impact of planned growth and anticipated
new business activities is factored into the simulation model.

PAGE  28

S&T's policy objective is to limit the change in annual pretax earnings to
$2.7 million from an immediate and sustained parallel change in interest
rates of 200 basis points. As of December 31, 1999 and 1998, respectively,
S&T had the following estimated earnings sensitivity profile:
[CAPTION]
<TABLE>

                                                 Immediate
                                              Change in Rates
(in millions)                               +200bp        -200bp
<S>                                        <C>             <C>
1999 Pretax earnings change                $(0.2)          $(1.2)
1998 Pretax earnings change                $(2.1)          $ 0.2
</TABLE>

Results of the gradual simulation model, showing changes from current rates
by 200 basis points over a 12-month period as of December 31, 1999 and 1998
are presented below.
[CAPTION]
<TABLE>

                                                  Gradual
                                             Change in Rates
(in millions)                               +200bp         -200bp
<S>                                        <C>            <C>
1999 Pretax earnings change                $(0.1)         $ 0.4
1998 Pretax earnings change                $(1.3)         $(0.9)
</TABLE>

Capital Resources
Shareholders' equity decreased $19.9 million at December 31, 1999 compared to
December 31, 1998. The primary source of equity growth for S&T is earnings
retention. Hence, capital growth is a function of net income less dividends
paid to shareholders and treasury stock activities.

Net income was $41.4 million and dividends declared to shareholders were
$20.6 million for 1999. S&T paid 49% of 1999 net income in dividends,
equating to an annual dividend rate of $0.76 per share. The decrease in
capital is attributable to the repurchase of approximately 834,000 shares of
its common stock during 1999. The repurchase of up to 1,000,000 shares in
1999 was authorized by the S&T Board of Directors. In December 1999, this
authorization was extended for 2000 for an additional repurchase of up to
1,000,000 shares. Also affecting capital was a decrease of $23.5 million in
unrealized gains on securities available for sale.

On September 21, 1998, the Board of Directors of S&T approved a two-for-one
common stock split which was effected in the form of a 100% stock dividend.
The new shares were distributed on October 30, 1998 to shareholders of record
on October 15, 1998. The split increased the number of shares outstanding to
27,578,220.

The book values of S&T's common stock decreased 5.4% from $9.38 at December
31, 1998 to $8.88 at December 31, 1999, primarily due to the decrease in
unrealized holding gains on securities available for sale and by the stock
buy-backs during 1999.

S&T continues to maintain a strong capital position with a leverage ratio of
9.9% as compared to the 1999 minimum regulatory guideline of 3%. S&T's risk-
based capital Tier 1 and Total ratios were 12.4% and 14.6%, respectively, at
December 31, 1999, which places S&T well above the Federal Reserve Board's
risk-based capital guidelines of 4% and 8% for Tier 1 and Total,
respectively. Included in the total ratio is 45% of the pretax unrealized
holding gains on available for sale equity securities as prescribed by
banking regulations effective October 1, 1998. In addition, management
believes that S&T has the ability to raise additional capital if necessary.

In April 1993, shareholders approved the S&T Incentive Stock Plan (Stock
Plan) authorizing the issuance of a maximum of 1,200,000 shares of S&T's
common stock in order to assist in attracting and retaining employees of
outstanding ability and to promote the identification of their interests with
those of the shareholders of S&T. On October 17, 1994, the Stock Plan was
amended to include outside directors. On April 21, 1997, shareholders
approved an amendment to the plan increasing the number of authorized shares
to 3,200,000. As of December 31, 1999, 2,187,422 nonstatutory stock options
had been granted to key employees and outside directors; 1,119,572 of these
options are currently exercisable.

Year 2000
During 1999, S&T completed the process of preparing for the Year 2000 date
change. This process involved identifying and remediating date recognition
problems in computer systems, software and other operating equipment, working
with third parties to address their Year 2000 issues, and developing
contingency plans to address potential risks in the event of Year 2000
failures. To date, S&T has successfully managed the transition.

Although considered unlikely, unanticipated problems in S&T's core business
processes, including problems associated with noncompliant third parties and
disruptions to the economy in general, could still occur despite efforts to
date to remediate affected systems and develop contingency plans. Management
will continue to monitor all business processes, including interaction with
S&T's business customers, vendors and other third parties, throughout 2000 to
address any issues and ensure all processes continue to function properly.

PAGE  29

Through 1999, the cost of the Year 2000 project totaled approximately $0.3
million. Purchased hardware and software was capitalized in accordance with
normal policy. Personnel and all other costs related to the project were
expensed as incurred.

Regulatory Matters
S&T and S&T Bank are subject to periodic examinations by one or more of the
various regulatory agencies. During 1999, an examination was conducted by the
Federal Deposit Insurance Corporation (FDIC). This examination included, but
was not limited to, procedures designed to review lending practices, credit
quality, liquidity, operations and capital adequacy of S&T and its
subsidiaries. No comments were received from the FDIC which would have a
material effect on S&T's liquidity, capital resources or operations. S&T's
current capital position and results of regulatory examination allow it to
pay the lowest possible rate for FDIC deposit insurance.

Inflation
Management is aware of the significant effect inflation has on interest rates
and can have on financial performance. S&T's ability to cope with this is
best determined by analyzing its capability to respond to changing interest
rates and its ability to manage noninterest income and expense. S&T monitors
its mix of interest rate sensitive assets and liabilities through ALCO in
order to reduce the impact of inflation on net interest income. Management
also controls the effects of inflation by reviewing the prices of its
products and services, by introducing new products and services and by
controlling overhead expenses.

Business Uncertainties
Due to the static economy in S&T's mature market area and the potential for
decline, management believes that values of loan collateral and the ability
of borrowers to repay could be adversely affected in an economic downturn.
However, because of S&T's adequate allowance for loan losses, earnings
strength and strong capitalization, as well as the strength of other
businesses in our market area, management does not expect a decline in S&T's
ability to satisfactorily perform if further decline in our economy occurs.
In addition, S&T's recent acquisitions provide expanded market opportunities
in areas with better growth potential.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act
of 1995
The statements in this Annual Report, which are not historical fact, are
forward looking statements that involve risks and uncertainties, including,
but not limited to, the interest rate environment, the effect of federal and
state banking and tax regulations, the effect of economic conditions, the
impact of competitive products and pricings, and other risks detailed in
S&T's Securities and Exchange Commission filings.

PAGE  30

Consolidated Balance Sheets S&T Bancorp, Inc. and Subsidiaries
[CAPTION]
<TABLE>

December 31                                          1999              1998
(dollars in thousands, except per share data)
<S>                                               <C>            <C>
Assets

Cash and due from banks                           $38,663           $48,736
Interest-earning deposits with banks                   54                53
Federal funds sold                                 15,400            19,300
Securities:
  Available for sale                              557,994           568,478
  Held to maturity (market value $17,527
   in 1999 and $23,824 in 1998)                    17,230            23,008
Total Securities                                  575,224           591,486

Loans, net of allowance for loan losses
  of $27,134 in 1999 and $26,677 in 1998        1,469,143         1,339,232
Premises and equipment                             20,678            20,932
Other assets                                       74,911            49,872
Total Assets                                   $2,194,073        $2,069,611

Liabilities

Deposits:
  Noninterest-bearing                          $  219,202        $  215,659
  Interest-bearing                              1,215,863         1,164,404
Total Deposits                                  1,435,065         1,380,063
Securities sold under repurchase agreements       116,009           138,825
Long-term borrowings                              364,062           240,068
Other liabilities                                  39,237            51,018
Total Liabilities                               1,954,373         1,809,974

Shareholders' Equity

Preferred stock, without par value, 10,000,000
  shares authorized and none outstanding                -                 -
Common stock ($2.50 par value)
  Authorized-50,000,000 shares in 1999
     and 1998
  Issued-29,714,038 shares in 1999
     and 1998                                      74,285            74,285
Additional paid-in capital                         21,070            21,234
Retained earnings                                 179,129           158,274
Accumulated other comprehensive income             16,410            39,961
Treasury stock (2,715,221 shares in 1999
  and 2,038,459 shares in 1998, at cost)          (51,194)          (34,117)
Total Shareholders' Equity                        239,700           259,637
Total Liabilities and Shareholders' Equity     $2,194,073        $2,069,611

See Notes to Consolidated Financial Statements.
</TABLE>

PAGE  31


Consolidated Statements of Income

S&T Bancorp, Inc. and Subsidiaries
[CAPTION]
<TABLE>

Year Ended December 31                  1999      1998       1997
(dollars in thousands, except
   per share data)
<S>                                  <C>      <C>       <C>
Interest Income

Loans, including fees               $120,333  $115,081   $108,891
Deposits with banks                        4         6          8
Federal funds sold                       543       308        523
Investment securities:
  Taxable                             29,377    29,984     25,421
  Tax-exempt                             942     1,557      2,250
  Dividends                            5,528     4,502      4,008
Total Interest Income                156,727   151,438    141,101

Interest Expense

Deposits                              47,278    49,570     47,966
Securities sold under
   repurchase agreements               6,519     8,968      6,602
Federal funds purchased                  229       383        472
Long-term borrowings                  15,916    10,226      7,227
Other borrowed funds                       -         9         17
Total Interest Expense                69,942    69,156     62,284
Net Interest Income                   86,785    82,282     78,817
Provision for Loan Losses              4,000    10,550      5,000
Net Interest Income After
  Provision for Loan Losses           82,785    71,732     73,817

Noninterest Income

Security gains, net                    3,240    10,722      5,446
Service charges on deposit accounts    6,234     5,548      4,603
Trust fees                             3,936     3,661      3,181
Other                                  6,690     4,487      3,211
Total Noninterest Income              20,100    24,418     16,441

Noninterest Expense

Salaries and employee benefits        22,726    22,086     22,816
Occupancy, net                         2,855     2,759      2,583
Furniture and equipment                2,445     2,688      3,170
Other taxes                            1,540     1,456      1,320
Data processing                        2,256     2,411      2,154
Amortization of intangibles              447       112          -
FDIC assessment                          238       228        240
Other                                 10,983    10,248     10,915
Total Noninterest Expense             43,490    41,988     43,198
Income Before Income Taxes            59,395    54,162     47,060
Applicable Income Taxes               17,977    16,199     13,646
Net Income                          $ 41,418  $ 37,963   $ 33,414

Per Common Share:1
  Net Income-Basic                  $   1.52  $   1.37   $   1.18
  Net Income-Diluted                    1.51      1.35       1.17
  Dividends Declared                    0.76      0.66       0.56
</TABLE>

1 Per share amounts have been restated to record the effect of a two-for-one
common stock split in the form of a 100% stock dividend distributed on
October 30, 1998.


See Notes to Consolidated Financial Statements.
PAGE 32

Consolidated Statements of Changes in Shareholders' Equity
S&T Bancorp, Inc. and Subsidiaries
[CAPTION]
<TABLE>

                                                                  Accumulated
                                          Additional                    Other
                      Comprehensive  Common  Paid-In  Retained  Comprehensive  Treasury      Deferred
                             Income   Stock  Capital  Earnings         Income     Stock  Compensation

(dollars in thousands,
except per share data)
<S>                         <C>     <C>      <C>      <C>             <C>      <C>              <C>
Balance at January 1, 1997  $    -  $37,142  $19,044  $157,982        $25,197  $(13,017)        $(230)
Comprehensive Income:
  Net income for 1997       33,414                      33,414
Other comprehensive income,
  net of tax: Unrealized
  gains on securities of
  $23,712 net of reclass-
  ification  adjustment
  for gains included in
  net income of $8,385      15,327                                     15,327
Cash dividends declared
  ($0.56 per share)1                                   (15,689)
Treasury stock acquired
  (138 shares)                                                                       (5)
Treasury stock issued
  (30,277 shares)                                325                                528
Deferred ESOP benefits
  Expense                                                                                     100
Comprehensive Income       $48,741

Balance at December 31, 1997        $37,142  $19,369  $175,707        $40,524  $(12,494)        $(130)
Comprehensive Income:
  Net income for 1998       37,963                      37,963
Other comprehensive income,
 net of tax: Unrealized
 gains on securities of
 $6,718 net of reclass-
 ification  adjustment
 for gains included in
 net income of $7,281         (563)                                      (563)
Cash dividends declared
  ($0.66 per share)                                    (18,253)
Treasury stock acquired
 (1,117,036 shares)                                                             (27,975)
Treasury stock issued
 (510,305 shares)                               (802)                             6,352
Tax Deductibility/Options                      2,667
Deferred ESOP benefits
  expense                                                                                       130
Transfer to reflect
  two-for-one stock split             37,143            (37,143)
Comprehensive Income       $37,400

Balance at December 31, 1998         $74,285  $21,234  $158,274       $39,961  $(34,117)       $  -
Comprehensive Income:
  Net income for 1999       41,418                       41,418
Other comprehensive income,
 net of tax: Unrealized
 losses on securities of
 $20,510 net of reclassi-
 fication  adjustment for
 gains included in
 net income of $3,041      (23,551)                                   (23,551)
Cash dividends declared
  ($0.76 per share)                                     (20,563)
Treasury stock acquired
 (834,207 shares)                                                               (20,007)
Treasury stock issued
  (157,445 shares)                               (684)                            2,930
Tax Deductibility/Options                         520
Comprehensive Income       $17,867

Balance at December 31, 1999         $74,285  $21,070  $179,129       $16,410  $(51,194)       $  -

1 Per share amounts have been restated to record the effect of a two-for-one
common stock split in the form of a 100% stock dividend distributed on
October 30, 1998.
</TABLE>


See Notes to Consolidated Financial Statements.
PAGE 33

Consolidated Statements of Cash Flows
S&T Bancorp, Inc. and Subsidiaries
[CAPTION]
<TABLE>

Year Ended December 31                      1999        1998        1997
(dollars in thousands)

Operating Activities
<S>                                     <C>         <C>         <C>
Net Income                              $ 41,418    $ 37,963    $ 33,414
Adjustments to reconcile
 net income to net cash
 provided by operating
 activities:
   Provision for loan losses               4,000      10,550       5,000
   Provision for depreciation
    and amortization                       2,220       2,158       2,163
   Net amortization of investment
    security premiums                        588         609         675
   Deferred income taxes                   1,228        (807)       (756)
   Securities gains, net                  (3,240)    (10,722)     (5,446)
   Decrease (increase) in interest
    receivable                               451         157      (1,601)
   Increase (decrease) in interest
    payable                                  484        (139)        395
   (Increase) decrease in other assets   (25,338)        776         819
   (Decrease) increase in other
     liabilities                          (1,377)     (2,214)        531
Net Cash Provided by Operating
 Activities                               20,434      38,331      35,194

Investing Activities

Net (increase) decrease in interest-
 earning deposits with banks                  (1)         49           7
Net decrease (increase) in federal
 funds sold                                3,900     (19,300)      6,465
Proceeds from maturities of
 investment securities                     5,778      20,772       3,146
Proceeds from maturities of
 securities available for sale           116,428     192,105     127,344
Proceeds from sales of securities
 available for sale                      268,230      96,233      77,826
Purchases of securities available
 for sale                               (407,755)   (323,130)   (248,077)
Net increase in loans                   (133,911)    (96,456)    (76,919)
Purchases of premises and equipment       (1,892)     (1,933)     (2,042)
Other, net                                   (74)        215        (696)
Net cash acquired in branch acquisition        -      31,604           -
Net Cash Used in Investing Activities   (149,297)    (99,841)   (112,946)

Financing Activities

Net increase in demand, NOW and
 savings deposits                        47,589      81,553        9,105
Net increase (decrease) in
 certificates of deposit                  7,414     (25,213)       5,186
Net (decrease) increase in
 federal funds purchased                      -      (9,325)       8,550
Net (decrease) increase in
 repurchase agreements                  (22,817)    (31,299)      55,919
Proceeds from FHLB long-term
 borrowings                             203,844     120,850       68,600
Payments from FHLB long-term
 Borrowings                             (79,850)    (25,000)     (61,000)
Acquisition of treasury stock           (17,761)    (27,975)          (5)
Exercise of stock options and
 related tax benefit                        520       8,219          853
Cash dividends paid to shareholders     (20,149)    (17,515)     (14,215)
Net Cash Provided by Financing
 Activities                             118,790      74,295       72,993

(Decrease) increase in Cash and
 Cash Equivalents                       (10,073)     12,785       (4,759)
Cash and Cash Equivalents at
 Beginning of Year                       48,736      35,951       40,710
Cash and Cash Equivalents at
 End of Year                           $ 38,663    $ 48,736     $ 35,951

See Notes to Consolidated Financial Statements.
<CAPTION>
</TABLE>

PAGE  34

Notes to Consolidated Financial Statements
S&T Bancorp, Inc. and Subsidiaries

Note A
Accounting Policies

The financial statements of S&T Bancorp, Inc. and subsidiaries (S&T) have
been prepared in accordance with accounting principles generally accepted in
the United States. In preparing the financial statements, management is
required to make estimates and assumptions that affect the reported amounts
of assets and liabilities as of the date of the balance sheet and revenues
and expenses for the period. Actual results could differ from those
estimates. The more significant accounting policies are described below.

Principles of Consolidation
The consolidated financial statements include the accounts of S&T and its
subsidiaries. All significant intercompany transactions have been eliminated
in consolidation. The investment in the subsidiaries is carried at S&T's
equity in the underlying net assets.

Securities
Management determines the appropriate classification of securities at the
time of purchase. If management has the intent and S&T has the ability at the
time of purchase to hold securities until maturity, they are classified as
held to maturity and are stated at cost adjusted for amortization of premiums
and accretion of discounts. All obligations of states and political
subdivisions and one corporate security are classified as held to maturity.
Securities to be held for indefinite periods of time are classified as
available for sale and are recorded at market value. All U.S. treasury
securities, U.S. government corporations and agencies, collateralized
mortgage obligations, all other corporate securities and marketable equity
securities are classified as available for sale. Gains or losses on the
disposition of securities are based on the specific identification method.
S&T does not engage in any securities trading activity.

Loans
Interest on loans is accrued and credited to operations based on the
principal amount outstanding. Accretion of discount on loans is included in
interest income. Loan origination fees and direct loan origination costs are
deferred and amortized as an adjustment of loan yield over the respective
lives of the loans. Loans are placed on nonaccrual and interest is
discontinued when collection of interest or principal is doubtful, or
generally when interest and principal are 90 days or more past due.

Impaired loans are defined by management as commercial and commercial real
estate loans for which it is probable that the Bank will not be able to
collect all amounts due according to the contractual terms of the loan
agreement. Residential real estate mortgages and consumer installment loans
are large groups of smaller balance homogenous loans and are separately
measured for impairment collectability. Factors considered by management in
determining impairment include payment status and underlying collateral
value. All impaired loans are classified as substandard for risk
classification purposes. Impaired loans are charged-off, to the estimated
value of collateral associated with the loan, when management believes
principal and interest are deemed uncollectible. The accrual of interest on
impaired loans is discontinued when, in management's opinion, the borrower
may be unable to meet the payments as they become due. When interest accrual
is discontinued, all unpaid accrued interest is reversed. Interest income is
subsequently recognized only to the extent that cash payments are received.

The allowance for loan losses is established through provisions for loan
losses charged against income. Loans considered to be uncollectible are
charged against the allowance, and recoveries, if any, are credited to the
allowance. The allowance for loan losses is maintained at a level believed
adequate by management to absorb probable losses in the loan portfolio.
Management's determination of the adequacy of the allowance is based on
periodic evaluations of the loan portfolio, past loan loss experience,
current economic conditions, volume, growth and composition of the loan
portfolio and other relevant factors.

Premises and Equipment
Premises and equipment are stated at cost less accumulated depreciation. The
provision for depreciation is computed generally by the straight-line method
for financial reporting purposes and by accelerated methods for federal
income tax purposes.

Other Real Estate
Other real estate is included in other assets and is comprised of properties
acquired through foreclosure proceedings or acceptance of a deed in lieu of a
foreclosure and loans classified as in-substance foreclosure. These
properties are carried at the lower of cost or fair value less cost of
resale. Loan losses arising from the acquisition of such property are charged
against the allowance for loan losses. Gains or losses realized subsequent to
acquisition are recorded in the results of operations.

PAGE  35

Income Taxes
Deferred tax assets and liabilities are reflected at currently enacted income
tax rates applicable to the period in which the deferred tax assets or
liabilities are expected to be realized or settled.

Trust Assets and Income
Assets held in a fiduciary capacity by the subsidiary bank, S&T Bank (Bank),
are not assets of the Bank and are therefore not included in the consolidated
financial statements. Trust fee income is reported on the accrual basis.

Pensions
Pension expense for the Bank's defined benefit pension plan is actuarially
determined using the projected unit credit actuarial cost method. The funding
policy for the plan is to contribute amounts to the plan sufficient to meet
the minimum funding requirements of the Employee Retirement Income Security
Act of 1974, plus such additional amounts as may be appropriate, subject to
federal income tax limitations.

Treasury Stock
The purchase of S&T common stock is recorded at cost. At the time of reissue,
the treasury stock account is reduced using the average cost method.

Earnings Per Share
Basic Earnings Per Share (EPS) is calculated by dividing net income by the
weighted average number of common shares outstanding during the period.
Average shares outstanding for computing basic EPS were 27,168,529,
27,762,801, and 28,263,036 for 1999, 1998 and 1997, respectively. Options,
warrants and other potentially dilutive securities are excluded from the
basic calculation, but are included in diluted EPS. Average shares
outstanding for computing dilutive EPS were 27,366,986, 28,055,142 and
28,618,364 for 1999, 1998 and 1997, respectively. In computing dilutive EPS,
average shares outstanding have been increased by the common stock
equivalents relating to S&T's outstanding stock options.

Operating Segments
An operating segment is defined as a component of an enterprise that engages
in business activities that generate revenue and incur expense, and the
operating results of which are reviewed by the chief operating decision maker
in the determination of resource allocation and performance. S&T's business
activities are currently confined to one segment which is community banking.

Cash Flow Information
S&T considers cash and due from banks as cash and cash equivalents. For the
years ended December 31, 1999, 1998 and 1997, cash paid for interest was
$69,518,000, $69,295,000 and $60,825,000, respectively. Cash paid during 1999
for income taxes was $14,368,000 compared to $15,567,000 for 1998 and
$14,190,000 for 1997.

Mortgage Loan Servicing
Mortgage servicing assets are recognized as separate assets when servicing
rights are acquired through purchase or loan originations, when there is a
definitive plan to sell the underlying loan. Capitalized mortgage servicing
rights are reported in other assets and are amortized into noninterest income
in proportion to, and over the period of, the estimated future net servicing
income of the underlying mortgage loans. Capitalized mortgage servicing
rights are evaluated for impairment based on the fair value of those rights.
In 1999 and 1998, $16.1 million and $10.9 million, respectively, of 1-4
family mortgage loans were sold to the Federal National Mortgage Association
(Fannie Mae), and $463,000 and $302,000, respectively, of mortgage servicing
rights were capitalized and recorded in other assets.

Reclassification
Amounts in prior years have been reclassed to conform to presentation in
1999. The reclassification had no effect on financial condition or results of
operations.

New Accounting Pronouncements
Financial Accounting Standards Board Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (Statement No. 133), as
amended by Financial Accounting Standards Board Statement No. 137,
"Accounting for Derivative Instruments and Hedging Activities-Deferral of the
Effective Date of Statement No. 133" (Statement No. 137), is effective in
2001, and requires measuring and recording the change in fair value of
derivative instruments. S&T is currently in the process of evaluating the
impact of Statement No. 133. Statement No. 133 is not expected to materially
affect S&T's financial position or results of operations.

PAGE  36

Note B

Fair Values of Financial Instruments
S&T utilized quoted market values, where available, to assign fair value to
its financial instruments. In cases where quoted market values were not
available, S&T used present value methods to estimate the fair value of its
financial instruments. These estimates of fair value are significantly
affected by the assumptions made and, accordingly, do not necessarily
indicate amounts which could be realized in a current market exchange. S&T
does not expect to realize the estimated amounts disclosed.

The following methods and assumptions were used by S&T in estimating its fair
value disclosures for financial instruments:

Cash and Cash Equivalents and Other Short-Term Assets
The carrying amounts reported in the consolidated balance sheet for cash and
due from banks, interest-earning deposits with banks and federal funds sold
approximate those assets' fair values.

Securities
Fair values for investment securities and securities available for sale are
based on quoted market prices.

Loans
For variable-rate loans that reprice frequently and with no significant
change in credit risk, fair values are based on carrying values. The fair
values for other loans are estimated using discounted cash flow analyses,
using interest rates currently being offered for loans with similar terms to
borrowers as measured by net credit losses and the loss of interest income
from nonaccrual loans. The carrying amount of accrued interest approximates
its fair value.

Deposits
The fair values disclosed for demand deposits (e.g., noninterest and
interest-bearing demand, money market and savings accounts) are, by
definition, equal to the amount payable on demand. The carrying amounts for
variable-rate, fixed-term certificates of deposits and other time deposits
approximate their fair value at year-end. Fair values for fixed-rate
certificates of deposit and other time deposits are based on the discounted
value of contractual cash flows, using interest rates currently being offered
for deposits of similar remaining maturities.

Short-Term Borrowings and Other Borrowed Funds
The carrying amounts of federal funds purchased, borrowings under repurchase
agreements and other borrowings approximate their fair values.

Long-Term Borrowings
The fair values disclosed for long-term borrowings are estimated using
current interest rates for long-term borrowings of similar remaining
maturities.

Loan Commitments and Standby Letters of Credit
Estimates of the fair value of these off-balance sheet items were not made
because of the short-term nature of these arrangements and the credit
standing of the counterparties. Also, unfunded loan commitments relate
principally to variable-rate commercial loans, and fees are not normally
assessed on these balances.

PAGE  37

Estimates of fair value have not been made for items which are not defined as
financial instruments, including such items as S&T's core deposit intangibles
and the value of its trust operation. S&T believes it is impractical to
estimate a representational fair value for these types of assets, which
represent significant value to S&T.

The following table indicates the estimated fair value of S&T's financial
instruments as of December 31:
[CAPTION]
<TABLE>

                                        1999                    1998
                               Estimated    Carrying   Estimated    Carrying
                              Fair Value       Value  Fair Value       Value
(dollars in thousands)
<S>                           <C>         <C>         <C>         <C>
Assets

  Cash                        $   38,717  $   38,717  $   48,789  $   48,789
  Federal funds sold              15,400      15,400      19,300      19,300
  Securities:
   Available for sale            557,994     557,994     568,478     568,478
   Held to maturity               17,527      17,230      23,824      23,008
  Loans                        1,487,385   1,496,277   1,382,029   1,365,909

Liabilities

  Deposits                    $1,436,040  $1,435,065  $1,388,634  $1,380,063
  Securities sold under
   repurchase agreements         116,009     116,009     138,825     138,825
  Long-term borrowings           356,009     364,062     246,397     240,068

Off-Balance Sheet

  Interest rate swaps          $      22    $      -   $     (33)   $      -

</TABLE>

Note C
Derivative Financial Instruments

S&T does not extensively use derivative financial instruments. The only type
of instrument that S&T utilizes is interest rate swaps.

S&T has one interest rate swap with a notional value totaling $10.0 million,
paying a fixed rate and receiving a variable rate. The purpose of this
transaction was to provide matched, fixed-rate funding for newly originated
loans, and to mitigate the risk associated with volatile liability funding.
At December 31, 1999, S&T was paying a fixed rate of 5.3% and receiving a
variable rate of 6.2% based upon the London Interbank Offer Rate. Interest
rate swaps are not reported in the consolidated balance sheets. Differences
between interest received and interest paid is reported as a component of
borrowing expense in the consolidated income statement.

Note D

Restrictions on Cash and Due from Bank Accounts
The Board of Governors of the Federal Reserve Bank impose certain reserve
requirements on all depository institutions. These reserves are maintained in
the form of vault cash or as a noninterest-bearing balance with the Federal
Reserve Bank. Required reserves averaged $17,609,000 during 1999.

PAGE  38

Note E

Securities

The following table indicates the composition of the securities portfolio at
December 31:
[CAPTION]
<TABLE>
                                                 Available for Sale
                                                 Gross       Gross
                                 Amortized  Unrealized  Unrealized     Market
1999                                  Cost       Gains      Losses      Value
(dollars in thousands)
<S>                               <C>          <C>        <C>        <C>
Obligations of U.S. government
  corporations and agencies       $345,329      $   86    $ (9,474)  $335,941
Mortgage-backed securities           6,179          12         (21)     6,170
U.S. treasury securities            13,709         417                 14,126
Corporate securities                66,395          11      (1,880)    64,526
Debt securities available
  for sale                         431,612         526     (11,375)   420,763
Marketable equity securities        61,635      42,073      (5,979)    97,729
Other securities                    39,502                             39,502
Total                             $532,749     $42,599    $(17,354)  $557,994

                                                  Held to Maturity
Obligations of states and
  political subdivisions          $ 15,231     $   235    $     (3)  $ 15,463
Corporate securities                 1,999          65                  2,064
Total                             $ 17,230     $   300    $     (3)  $ 17,527

</TABLE>

<TABLE>
                                                 Available for Sale
                                                 Gross       Gross
                                 Amortized  Unrealized  Unrealized     Market
1998                                  Cost       Gains      Losses      Value
(dollars in thousands)
<S>                               <C>          <C>          <C>      <C>
Obligations of U.S. government
  corporations and agencies       $353,393     $ 4,035     $   (11)  $357,417
Mortgage-backed securities           8,410         305                  8,715
U.S. treasury securities            26,374       1,578                 27,952
Corporate securities                35,902         454          (3)    36,353
Debt securities available
  for sale                         424,079       6,372         (14)   430,437
Marketable equity securities        60,411      55,597        (476)   115,532
Other securities                    22,509                             22,509
Total                             $506,999     $61,969    $   (490)  $568,478

                                                   Held to Maturity
Obligations of states and
  political subdivisions          $ 21,009      $  647               $ 21,656
Corporate securities                 1,999         169                  2,168
Total                            $  23,008     $   816     $     -   $ 23,824

</TABLE>

PAGE  39

There were $5,833,000, $11,881,000 and $6,031,000 in gross realized gains and
$2,593,000, $1,159,000 and $585,000 in gross realized losses in 1999, 1998
and 1997, respectively, relative to securities available for sale.

The amortized cost and estimated market value of debt securities at December
31, 1999, by contractual maturity, are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

For purposes of the maturity table, mortgage-backed securities, which are not
due at a single maturity date, have been allocated over maturity groupings
based on the weighted-average contractual maturities of the underlying
collateral. The mortgage-backed securities may mature earlier than their
weighted-average contractual maturities because of principal prepayments.
[CAPTION]
<TABLE>

                                                Amortized        Market
Available for Sale                                   Cost         Value
(dollars in thousands)
<S>                                            <C>            <C>
Due in one year or less                        $   14,211     $  14,327
Due after one year through five years             237,060       230,604
Due after five years through 10 years             177,933       173,437
Due after 10 years                                  2,408         2,395
Total                                           $ 431,612     $ 420,763

                                                Amortized        Market
Held to Maturity                                     Cost         Value

Due in one year or less                         $   2,907     $   2,928
Due after one year through five years              12,846        13,104
Due after five years through 10 years               1,477         1,495
Total                                          $   17,230     $  17,527
</TABLE>

At December 31, 1999 and 1998, securities with principal amounts of
$317,979,000 and $295,286,000, respectively, were pledged to secure
repurchase agreements and public and trust fund deposits.

Note F
Loans

The following table indicates the composition of the loan portfolio at
December 31:
[CAPTION]
<TABLE>
                                      1999             1998
(dollars in thousands)
<S>                              <C>              <C>
Real estate-construction         $  94,786        $  87,246
Real estate-mortgages:
  Residential                      466,881          492,570
  Commercial                       527,970          407,445
Commercial and industrial          302,877          265,297
Consumer installment               103,763          113,351
Gross Loans                     $1,496,277       $1,365,909
Allowance for loan losses          (27,134)         (26,677)
Net Loans                       $1,469,143       $1,339,232
</TABLE>

PAGE  40

The following table presents changes in the allowance for loan losses for the
year ended December 31:
[CAPTION]
<TABLE>
                                   1999        1998        1997
(dollars in thousands)
<S>                          <C>          <C>         <C>
Balance at beginning of year $   26,677   $  20,427   $  18,729
Charge-offs                      (7,002)     (5,999)     (4,481)
Recoveries                        3,459       1,699       1,179
Net charge-offs                  (3,543)     (4,300)     (3,302)
Provision for loan losses         4,000      10,550       5,000
Balance at end of year       $   27,134  $   26,677   $  20,427
</TABLE>

The Bank has granted loans to certain officers and directors of S&T as well
as certain affiliates of the officers and directors in the ordinary course of
business. These loans were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with unrelated persons and did not involve more than normal risk
of collectibility. The aggregate dollar amounts of these loans were
$43,478,000 and $40,862,000 at December 31, 1999 and 1998, respectively.
During 1999, $50,543,000 of new loans were funded and repayments totaled
$47,927,000.

The principal balances of loans on nonaccrual were $2,987,000 and $2,933,000
at December 31, 1999, and 1998, respectively. At December 31, 1999, there
were no commitments to lend additional funds on nonaccrual loans. Other real
estate owned, which is included in other assets, was $291,000 at December 31,
1999 and $721,000 at December 31, 1998.

The following table represents S&T's investment in loans considered to be
impaired and related information on those impaired loans:
[CAPTION]
<TABLE>

                                            	1999	         1998	         1997
(dollars in thousands)
<S>                                   <C>            <C>           <C>
Recorded investment in loans
  considered to be impaired           $11,602,000    $3,391,000    $1,869,000
Loans considered to be impaired
  that were on a nonaccrual basis               -             -             -
Allowance for loan losses related
  to loans considered to be
  impaired                                 73,000       133,000       914,000
Average recorded investment in
  impaired loans                        5,948,000     2,927,000     6,329,000
Total interest income recognized
  on impaired loans                     1,271,000       674,000       656,000
Interest income on impaired loans
  recognized on a cash basis            1,107,000       605,000             -
</TABLE>

PAGE  41

Note G

Premises and Equipment

The following table is a summary of the premises and equipment accounts at
December 31:
[CAPTION]
<TABLE>

                                		1999           	1998
(dollars in thousands)
<S>                          <C>             <C>
Land                         $   3,048       $   3,026
Premises                        18,705          18,619
Furniture and equipment         15,006          13,568
Leasehold improvements           3,015           2,973
                                39,774          38,186
Accumulated depreciation       (19,096)        (17,254)
Total                       $   20,678      $   20,932
</TABLE>


Certain banking facilities and equipment are leased under short-term lease
arrangements expiring at various dates to the year 2009. All such leases are
accounted for as operating leases. Rental expense for premises and equipment
amounted to $1,266,000, $1,497,000 and $1,215,000 in 1999, 1998 and 1997,
respectively. Minimum annual rentals for each of the years 2000-2004 are
approximately $578,000, $449,000, $227,000, $227,000, and $228,000,
respectively, and $633,000 for the years thereafter. Included in the above
are leases entered into with two directors of for which rental expense
totaled $397,751, $338,921 and $348,497 in 1999, 1998 and 1997, respectively.

Note H

Deposits

The following table indicates the composition of deposits at December 31:
[CAPTION]
<TABLE>

                                          1999             1998
(dollars in thousands)
<S>                                  <C>              <C>
Noninterest-bearing demand           $ 219,202        $ 215,659
Interest-bearing demand                120,211          123,387
Money market                           295,258          239,349
Savings                                159,797          168,485
Time deposits                          640,597          633,183
Total                               $1,435,065       $1,380,063
</TABLE>

 The aggregate of all time deposits over $100,000 amounted to $85,649,000 and
$91,173,000 for December 31, 1999 and 1998, respectively.

PAGE  42

The following table indicates the scheduled maturities of time deposits at
December 31:
[CAPTION]
<TABLE>

                                     1999             1998
(dollars in thousands)
<S>                              <C>              <C>
Due in one year                  $329,870         $386,960
Due in one to two years           122,773          143,355
Due in two to three years         123,762           34,499
Due in three to four years         34,099           26,005
Due in four to five years          19,230           26,430
Due after five years               10,863           15,934
Total                            $640,597         $633,183
</TABLE>


Note I
Long-Term Borrowings

The following table is a summary of long-term borrowings with the Federal
Home Loan Bank (FHLB):
[CAPTION]
<TABLE>

                                     1999                1998
                                          Average               Average
                                Balance      Rate    Balance       Rate
(dollars in thousands)
<S>                            <C>           <C>    <C>            <C>
Due in one year                $ 19,600      5.93%  $      -          -%
Due in one to two years          55,000      5.90     19,600       5.08
Due in two to three years        40,000      6.27     30,000       6.02
Due in three to four years       86,000      5.75     61,000       5.19
Due in four to five years        51,500      6.18     25,000       5.18
Due after five years             33,118      5.35     44,618       5.61
Total                          $285,218      5.89%  $180,218       5.42%
</TABLE>

The purpose of these borrowings was to match-fund selected new loan
originations, to mitigate interest rate sensitivity risks and to take
advantage of discounted borrowing rates through the FHLB for community
investment projects.

S&T pledged all 1-4 family and multi-family mortgage loans as collateral for
any current or future FHLB borrowings. The total carrying amount of these
pledged loans was $396,639,000 at December 31, 1999.

At December 31, 1999 and 1998, S&T had long-term repurchase agreement
borrowings totaling $78,844,000 and $59,850,000, respectively, at a weighted
average fixed rate of 5.58% and 6.20%, respectively, which mature in five
years. The purpose of these borrowings was to lock in fixed-rate fundings to
mitigate interest rate risk.

Note J

Short-Term Debt

Federal funds purchased and securities sold under repurchase agreements
(REPOS) generally mature within one to 14 days from the transaction date. S&T
defines REPOS with its retail customers as retail REPOS, and wholesale REPOS
are those transacted with other financial institutions.

PAGE  43

Information concerning federal funds purchased and REPOS is summarized as
follows:
[CAPTION]
<TABLE>
                                                1999             1998
(dollars in thousands)
<S>                                         <C>              <C>
Average balance during the year             $142,852         $177,968
Average interest rate during the year           4.72%            5.29%
Maximum month-end balance during the year   $212,361         $251,030
Average interest rate at year-end               5.06%            4.63%
</TABLE>


Note K

Dividend and Loan Restrictions
Certain restrictions exist regarding the ability of S&T Bank to transfer
funds to S&T in the form of dividends and loans. Dividends that may be paid
by S&T Bank to S&T are limited to the retained earnings of S&T Bank which
amounted to $103,557,000 at December 31, 1999. The amount of dividends that
may be paid to S&T is further restricted by regulatory guidelines concerning
minimum capital requirements.

Federal law prohibits S&T from borrowing from S&T Bank unless such loans are
collateralized by specific obligations. Further, such loans are limited to
10% of S&T Bank's capital and additional paid-in capital, as defined. At
December 31, 1999, the maximum amount available for transfer from S&T Bank to
S&T in the form of loans and dividends approximated 45% of consolidated net
assets.

Note L

Litigation
S&T, in the normal course of business, is subject to various legal
proceedings in which claims for monetary damages are asserted. No material
losses are anticipated by management as a result of these legal proceedings.

Note M

Financial Instruments and Credit Risk
S&T, in the normal course of business, commits to extend credit and issues
standby letters of credit. The obligations are not recorded in S&T's
financial statements. Loan commitments and standby letters of credit are
subject to S&T's normal credit underwriting policies and procedures and
generally require collateral based upon management's evaluation of each
customer's financial condition and ability to satisfy completely the terms of
the agreement. S&T's exposure to credit loss in the event the customer does
not satisfy the terms of the agreement equals the notional amount of the
obligation less the value of any collateral. Unfunded loan commitments
totaled $440,400,000 and $372,450,000 at December 31, 1999 and 1998,
respectively; and obligations under standby letters of credit totaled
$140,642,000 and $78,490,000 at December 31, 1999 and 1998, respectively.

PAGE  44

S&T attempts to limit its exposure to concentrations of credit risk by
diversifying its loan portfolio. S&T defines concentrations of credit risk as
loans to a specific industry or group in excess of 10% of total loans. S&T
has no concentration of credit risk by industry or group. However, geographic
concentrations exist because S&T provides a full range of banking services
including commercial, consumer and mortgage loans to individuals and
corporate customers in its seven-county market area in western Pennsylvania.

Note N

Income Taxes
Income tax expense (credits) for the year ended December 31 are comprised of:
[CAPTION]
<TABLE>

                           1999      1998      1997
(dollars in thousands)
<S>                     <C>       <C>       <C>
Current                 $16,749   $17,006   $14,402
Deferred                  1,228      (807)     (756)
Total                   $17,977   $16,199   $13,646
</TABLE>


The provision for income taxes differs from the amount computed by applying
the statutory federal income tax rate to income before income taxes. The
statutory to effective tax rate reconciliation for the years ended December
31 is as follows:
[CAPTION]
<TABLE>

                                    1999     1998     1997
(dollars in thousands)
<S>                                  <C>       <C>     <C>
Statutory tax rate                    35%      35%      35%
Tax-exempt interest income
  and dividend exclusion              (3)      (3)      (4)
Low income housing tax credits        (2)      (2)      (2)
Effective tax rate                    30%      30%      29%
</TABLE>


Income taxes applicable to security gains were $1,134,000 in 1999, $3,753,000
in 1998 and $1,906,000 in 1997.

PAGE  45

Significant components of S&T's temporary differences were as follows at
December 31:
[CAPTION]
<TABLE>

                                               1999          1998
(dollars in thousands)
<S>                                       <C>           <C>
Deferred tax liabilities:
  Net unrealized holding gains
   on securities available for sale       $ (8,836)     $(21,518)
  Fixed assets                                (621)         (644)
  Accretion on acquired loans                 (326)         (559)
  Prepaid pension                             (119)         (166)
  Prepaid hospitalization                     (102)         (102)
  Market-to-market adjustments              (2,307)       (1,825)
  Point recognition                         (1,872)         (830)
Total deferred tax liabilities             (14,183)      (25,644)
Deferred tax assets:
  Allowance on loan losses                   9,287         9,127
  Loan fees                                    627           558
  Interest expense on increasing rate CDs       17           114
  Deferred compensation                        850           799
  Goodwill                                     273           312
  Other                                         55           206
Total deferred tax assets                   11,109        11,116
Net deferred tax liability                $ (3,074)     $(14,528)
</TABLE>

Note O

Employee Benefits
The Bank maintains a defined benefit pension plan covering substantially all
employees. The benefits are based on years of service and the employee's
compensation during the last ten years of employment. Contributions are
intended to provide for benefits attributed to employee service to date and
for those benefits expected to be earned in the future. Trustee pension plan
assets consist primarily of equity and fixed income securities and short-term
investments.

The following table summarizes the components of net periodic pension expense
for the Bank's defined benefit plan:
[CAPTION]
<TABLE>

                                     1999        1998        1997
(dollars in thousands)
<S>                               <C>        <C>         <C>
Service cost-benefits earned
   during the period              $ 1,121    $  1,068    $  1,103
Interest cost on projected
   benefit obligation               1,604       1,489       1,378
Expected return on plan assets     (2,556)     (2,070)     (1,774)
Net amortization and deferral         (35)        (14)        (16)
Net periodic pension expense       $  134     $   473     $   691
</TABLE>

PAGE  46

The following tables summarize the activity in the benefit obligation and
plan assets:
[CAPTION]
<TABLE>

                                                 1999         1998
(dollars in thousands)
<S>                                          <C>          <C>
Change in Benefit Obligation

Benefit obligation at beginning of year      $ 25,171     $ 23,385
Service cost                                    1,121        1,068
Interest cost                                   1,604        1,489
Plan participants' contributions                   43          166
Actuarial (gain)/loss                          (1,884)         101
Benefits paid                                  (1,055)      (1,038)
Benefit obligation at end of year            $ 25,000     $ 25,171

Change in Plan Assets

Fair value of plan assets at
   beginning of year                        $ 28,897      $ 26,043
Actual return on plan assets                   3,158         2,992
Employer contributions                             -           734
Plan participants' contributions                  43           166
Benefits paid                                 (1,055)       (1,038)
Fair value of plan assets at end of year    $ 31,043      $ 28,897
</TABLE>


The following table sets forth the plan's funded status and the accrued
pension cost in the consolidated balance sheets at December 31:
[CAPTION]
<TABLE>

                                             		1999          	1998
(dollars in thousands)
<S>                                        <C>            <C>
Benefit obligation at beginning of year    $(25,000)      $(25,171)
Fair value of plan assets at end of year     31,043         28,897
Funded status                                 6,043          3,726
Unrecognized net gain                        (5,683)        (3,216)
Unamortized prior service cost                   70             77
Balance of initial unrecognized net asset       (29)           (51)
Prepaid pension cost included in other
  assets                                    $   401        $   536
</TABLE>

Below are actuarial assumptions used in accounting for the plan:
[CAPTION]
<TABLE>

                                                        1999    1998   1997
<S>                                                      <C>     <C>    <C>
Weighted-average discount rate                           7.0%    6.5%   6.5%
Rate of increase in future compensation levels           5.0     5.0    5.0
Expected long-term rate of return on plan assets         9.0     8.0    8.0
</TABLE>

PAGE  47

S&T also has a supplemental retirement plan (SERP) for certain key employees.
The SERP is unfunded. The balances of the actuarial present values of
projected benefit obligations related to the SERP are $2,136,000 and
$2,249,000 at December 31, 1999 and 1998, respectively. Accrued pension costs
related to the SERP were $2,114,000 and $1,971,000 at December 31, 1999 and
1998. Net periodic pension cost related to the SERP was $224,000, $244,000
and $499,000 at December 31, 1999, 1998 and 1997, respectively. The actuarial
assumptions are the same as those used in the previous tables.

The Bank maintains a Thrift Plan (Plan) in which substantially all employees
are eligible to participate. The Bank makes matching contributions to the
Plan up to 3% of participants' eligible compensation and may make additional
profit-sharing contributions as limited by the Plan. Contributions to the
Plan have been cash or unallocated Employee Stock Option Plan (ESOP) shares.
Expense related to these contributions amounted to $1,328,000, $813,000 and
$990,000 in 1999, 1998 and 1997, respectively.

On December 30, 1988, S&T had sold 560,000 shares of treasury stock to the
recently concluded ESOP for $2,800,000. The ESOP covered substantially all
regular full-time employees. At December 31, 1999 and 1998, the ESOP had no
unallocated shares remaining.

Note P

Incentive Stock Plan and Dividend Reinvestment Plan
S&T adopted an Incentive Stock Plan in 1992 (Stock Plan) that provides for
granting incentive stock options, nonstatutory stock options and stock
appreciation rights (SARs). On October 17, 1994, the Stock Plan was amended
to include outside directors. The Stock Plan covers a maximum of 3,200,000
shares of S&T common stock and expires ten years from the date of board
approval. At December 31, 1999, 2,187,422 nonstatutory stock options had been
granted under the stock plan.

Each year S&T has granted nonstatutory stock options at exercise prices equal
to the fair market value of S&T common stock on the grant date.

Stock options granted under the Stock Plan are not exercisable before a six-
month vesting period or after ten years from the date of grant. There were no
SARs issued or outstanding at December 31, 1999 and 1998. The following table
summarizes the changes in the nonstatutory stock options outstanding during
1999, 1998 and 1997:
[CAPTION]
<TABLE>
                                   1999                      1998                   1997
                                      Weighted                 Weighted               Weighted
                                       Average                  Average                Average
                               Number   Option         Number    Option       Number    Option
                            of Shares    Price      of Shares     Price    of Shares     Price
<S>                         <C>         <C>         <C>          <C>       <C>         <C>
Outstanding at beginning
  of year                   1,280,572   $19.08      1,457,822    $14.21    1,112,000   $12.06
  Granted                     315,800    22.88        334,800     27.75      372,822    20.38
  Exercised                  (157,400)   14.64       (510,250)    10.90      (27,000)   10.66
  Forfeited                    (3,600)   27.75         (1,800)    20.38            -        -
Outstanding at end of year  1,435,372   $20.41      1,280,572    $19.08    1,457,822   $14.21
Exercisable at end of year  1,119,572   $19.72        945,772    $16.01    1,085,000   $12.10
</TABLE>

PAGE  48

The following table summarizes the range of exercise prices at December 31:
[CAPTION]
<TABLE>

                     1999                                   1998                                 1997
                             Contractual                          Contractual                          Contractual
           Shares  Exercise    Remaining        Shares  Exercise    Remaining        Shares  Exercise    Remaining
      Outstanding     Price  Life (Years)  Outstanding     Price  Life (Years)  Outstanding     Price  Life (Years)
<S>     <C>          <C>              <C>    <C>          <C>             <C>     <C>          <C>        <C>
1992            -         -             -            -         -            -        80,000    $ 6.82       5
1993            -         -             -            -         -            -       124,000      8.63       6
1994       84,400    $ 9.50             5      121,650    $ 9.50            6       227,000      9.50       7
1995      180,650     13.13             6      214,200     13.13            7       324,000     13.13       8
1996      192,500     15.44             7      254,500     15.44            8       330,000     15.44       9
1997      331,422     20.38             8      355,422     20.38            9       372,822     20.38      10
1998      330,600     27.75             9      334,800     27.75           10             -         -       -
1999      315,800     22.88            10            -         -            -             -         -       -
Total   1,435,372    $20.41           8.1    1,280,572    $19.08          8.4     1,457,822    $14.21     8.2
</TABLE>

Options are granted in December and have a six-month vesting period and a
ten-year contractual life.

S&T accounts for stock options in accordance with APB 25. The following
proforma information regarding net income and earnings per share assumes the
adoption of Statement No. 123 for stock options granted subsequent to
December 31, 1994. (Disclosure is not required for options granted prior to
1995). The estimated fair value of the options is amortized to expense over
the option and vesting period. The fair value was estimated at the date of
grant using a Black-Scholes option pricing model with the following weighted-
average assumptions for 1999, 1998 and 1997, respectively: risk-free interest
rates of 6.19%, 4.45% and 5.77%; a dividend yield of 3.5%, 2.7% and 3%;
volatility factors of the expected market price of S&T's common stock of
 .270, .226 and .182; and a weighted-average expected life of five years.
[CAPTION]
<TABLE>

                                            1999        1998       1997
(dollars in thousands except per share data)
<S>                                      <C>         <C>        <C>
Proforma net income                      $40,182     $37,030    $32,845
Proforma earnings per share-Basic           1.48        1.33       1.16
Proforma earnings per share-Diluted         1.47        1.32       1.15
</TABLE>

The Black-Scholes option valuation model was developed for use in estimating
the fair value of traded options which have no vesting restrictions and are
fully transferable. In addition, option valuation models require the input of
highly subjective assumptions including the expected stock price volatility.
Because S&T's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in
management's opinion, the existing models do not necessarily provide a
reliable single measure of the fair value of its employee stock options.

PAGE  49

S&T also sponsors a dividend reinvestment plan (Dividend Plan) whereby
shareholders may purchase shares of S&T common stock at market value with
reinvested dividends and voluntary cash contributions. American Stock
Transfer and Trust Company, the plan administrator and transfer agent,
purchases the shares on the open market to fulfill the Dividend Plan's needs.

Note Q

S&T Bancorp, Inc. (parent company only)
Condensed Financial Information
[CAPTION]
<TABLE>

Balance Sheets at December 31:                         1999         1998
(dollars in thousands)
<S>                                                <C>          <C>
Assets

Cash                                               $     23      $   409
Investments in:
  Bank subsidiary                                   146,496      159,245
  Nonbank subsidiaries                               95,389      102,301
Total Assets                                       $241,908     $261,955

Liabilities

Dividends payable                                  $  5,396     $  4,980
Other liabilities                                    (3,188)      (2,662)
Total Liabilities                                     2,208        2,318
Total Shareholders' Equity                          239,700      259,637
Total Liabilities and Shareholders' Equity         $241,908     $261,955
</TABLE>

[CAPTION]
<TABLE>

Statements of Income for the
  year ended December 31:                  1999        1998        1997
(dollars in thousands)
<S>                                    <C>         <C>         <C>
Dividends from bank subsidiary         $ 20,565    $ 18,253    $ 15,689
Investment income                            60          84          60
Income before equity in
   undistributed net income
   of subsidiaries                       20,625      18,337      15,749
Equity in undistributed net income of:
  Bank subsidiary                        13,517       9,919      13,316
  Nonbank subsidiaries                    7,276       9,707       4,349
Net Income                             $ 41,418    $ 37,963    $ 33,414
</TABLE>

PAGE  50

Statements of Cash Flows for the year ended December 31:
[CAPTION]
<TABLE>
                                           1999         1998         1997
(dollars in thousands)
<S>                                     <C>          <C>           <C>
Operating Activities

Net Income                              $ 41,418     $ 37,963      $33,414
  Equity in undistributed net
    income of subsidiaries               (22,208)     (21,069)     (19,640)
  Change in other assets/liabilities        (526)      (2,662)           -
Total Provided by Operating Activities    18,684       14,232       13,774

Investing Activities

  Distributions from (to) bank
    Subsidiaries                          18,320       23,431       (2,914)
Total Provided (Used) in Investing
    Activities                            18,320       23,431       (2,914)

Financing Activities

  Dividends                              (20,149)     (17,515)     (14,215)
  (Acquisition) sale of treasury stock   (17,241)     (19,758)         848
Total Used in Financing Activities       (37,390)     (37,273)     (13,367)
(Decrease) increase in Cash                 (386)         390       (2,507)
Cash at Beginning of Year                    409           19        2,526
Cash at End of Year                      $    23      $   409      $    19
</TABLE>

Note R

Regulatory Matters
S&T is subject to various regulatory capital requirements administered by the
federal banking agencies. Failure to meet the minimum capital requirements
can initiate certain mandatory and possibly additional discretionary actions
by regulators that, if undertaken, could have a direct material effect on
S&T's financial statements. Under capital guidelines and the regulatory
framework for prompt corrective action, S&T must meet specific capital
guidelines that involve quantitative measures of S&T's assets, liabilities
and certain off-balance-sheet items as calculated under regulatory accounting
practices. S&T's capital amounts and classification are also subject to
qualitative judgements by the regulators about components, risk weightings
and other factors.

Quantitative measures established by regulation to ensure capital adequacy
require S&T to maintain minimum amounts and ratios of Tier I and Total
capital to risk-weighted assets and of Tier I capital to average assets. As
of December 31, 1999 and 1998, S&T meets all capital adequacy requirements to
which it is subject.

PAGE  51

To be classified as well capitalized, S&T must maintain minimum Tier I risk-
based, Total risk-based and Tier I 	leverage ratios as set forth in the table
below:
[CAPTION]
<TABLE>

                                                                   To Be Well
                                           For Capital      Capitalized Under
                                              Adequacy      Prompt Corrective
                            Actual            Purposes      Action Provisions
                            Amount  Ratio    Amount  Ratio      Amount  Ratio
(dollars in thousands)
<S>                       <C>       <C>     <C>       <C>    <C>       <C>
As of December 31, 1999:
 Total Capital            $255,385  14.59%  $140,057  8.00%  $175,071  10.00%
 (to Risk Weighted Assets)
 Tier I Capital            217,194  12.41     70,028  4.00    105,043   6.00
 (to Risk Weighted Assets)
 Tier I Capital            217,194   9.90     87,785  4.00    109,731   5.00
 (to Average Assets)
As of December 31, 1998:
 Total Capital            $231,159  15.98%  $120,163  8.00%  $150,204  10.00%
 (to Risk Weighted Assets)
 Tier I Capital            212,975  14.73     60,081  4.00     90,122   6.00
 (to Risk Weighted Assets)
 Tier I Capital            212,975  10.68     79,781  4.00     99,727   5.00
 (to Average Assets)
</TABLE>

The most recent notification from the Federal Deposit Insurance Corporation
categorized S&T Bank as well capitalized under the regulatory framework for
corrective action. At December 31, 1999, S&T Bank's Tier I and Total capital
ratios were 9.03% and 10.29%, respectively, and Tier I capital to average
assets was 7.08%. At December 31, 1998, S&T Bank's Tier I and Total capital
ratios were 10.42% and 11.68%, respectively, and Tier I capital to average
assets was 7.48%.

PAGE  52

Report of Ernst & Young LLP, Independent Auditors
S&T Bancorp, Inc. and Subsidiaries

Shareholders and Board of Directors
S&T Bancorp, Inc.

We have audited the accompanying consolidated balance sheets of S&T Bancorp,
Inc. and subsidiaries (S&T) as of December 31, 1999 and 1998, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1999.
These financial statements are the responsibility of S&T's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of S&T Bancorp,
Inc. and subsidiaries at December 31, 1999 and 1998 and the consolidated
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.


/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
January 14, 2000

PAGE  53

Stock Prices and Dividend Information
Selected Financial Information
S&T Bancorp, Inc. and Subsidiaries

Stock Prices and Dividend Information

S&T Bancorp, Inc.'s common stock is listed on the Nasdaq National Market
System (Nasdaq). The range of sales prices for the years 1999 and 1998 are as
follows and are based upon information obtained from Nasdaq. As of the close
of business January 26, 2000, there were 3,218 shareholders of record of S&T
Bancorp, Inc. Dividends paid by S&T are provided from the Bank's dividends to
S&T. In addition, the payment of dividends by the Bank to S&T is subject to
the restrictions described in Note K to the Consolidated Financial
Statements. The cash dividends declared shown below represent the historical
per share amounts for S&T Bancorp, Inc. common stock.

[CAPTION]
<TABLE>

                  Price Range of Common Stock

1999                     Low      High             Cash Dividends Declared
<S>                 <C>       <C>                        <C>
Fourth Quarter      $  21.63  $  24.63                   $   0.20
Third Quarter          21.94     26.00                       0.19
Second Quarter         20.88     26.88                       0.19
First Quarter          19.00     29.00                       0.18

1998
Fourth Quarter      $  24.00  $  29.50                   $   0.18
Third Quarter          23.38     28.75                       0.17
Second Quarter         25.38     28.38                       0.17
First Quarter          20.88     28.88                       0.15
</TABLE>


Selected Financial Information
[CAPTION]
<TABLE>

Year Ended December 31:        1999      1998      1997      1996      1995
(dollars in thousands, except per share data)
<S>                        <C>       <C>       <C>       <C>       <C>
Income Statements
Interest income            $156,727  $151,438  $141,101  $132,442  $127,020
Interest expense             69,942    69,156    62,284    58,589    57,677
Provision for loan losses     4,000    10,550     5,000     5,175     4,220
Net interest income after
  provision for loan losses  82,785    71,732    73,817    68,678    65,123
Noninterest income           20,100    24,418    16,441    11,997     9,147
Noninterest expense          43,490    41,988    43,198    42,398    40,276
Income before income taxes   59,395    54,162    47,060    38,277    33,994
Applicable income taxes      17,977    16,199    13,646    10,036     9,152
Net income                 $ 41,418  $ 37,963  $ 33,414  $ 28,241  $ 24,842
Per Share Data1

Net income-Basic           $   1.52  $   1.37  $   1.18  $   1.00  $   0.87
Net income-Diluted             1.51      1.35      1.17      1.00      0.87
Dividends declared             0.76      0.66      0.56      0.47      0.37
Book value                     8.88      9.38      9.20      8.01      7.50

1 Per share amounts have been restated to record the effect of a two-for-one
common stock split in the form of a 100% stock dividend distributed on
October 30, 1998.
</TABLE>

PAGE  54

Selected Financial Data
Quarterly Selected Financial Data
S&T Bancorp, Inc. and Subsidiaries

Selected Financial Data
Balance Sheet Totals (period end):
[CAPTION]
<TABLE>

Year Ended December 31:        1999       1998       1997       1996       1995
(dollars in thousands)
<S>                      <C>        <C>        <C>        <C>        <C>
Total assets             $2,194,073 $2,069,611 $1,920,291 $1,787,045 $1,689,728
Securities                  575,224    591,486    568,220    500,061    492,236
Net loans                 1,469,143  1,339,232  1,253,326  1,181,407  1,086,317
Total deposits            1,435,065  1,380,063  1,284,658  1,270,367  1,216,547
Securities sold under
 repurchase agreements      116,009    138,825    170,124    114,205    122,794
Other liabilities           403,299    291,086    205,391    176,355    136,333
Total shareholders' equity  239,700    259,637    260,118    226,118    214,054
</TABLE>


Quarterly Selected Financial Data
[CAPTION]
<TABLE>

                                                1999                                1998
                               Fourth      Third     Second      First     Fourth      Third     Second      First
                              Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter    Quarter

(dollars in thousands, except per share data)
Summary of Operations
<S>                        <C>        <C>        <C>        <C>        <C>         <C>       <C>         <C>
Income Statements:
Interest income            $   41,318 $   39,829 $   38,239 $   37,341 $   38,373  $  38,345 $   37,548  $  37,172
Interest expense               19,119     17,926     16,636     16,261     17,500     17,577     17,247     16,832
Provision for loan losses       1,000      1,000      1,000      1,000      2,500      2,000      4,000      2,050
Net interest income after
  provision for loan losses    21,199     20,903     20,603     20,080     18,373     18,768     16,301     18,290
Noninterest income              4,937      5,407      4,481      5,275      6,318      4,328      8,326      5,446
Noninterest expense            10,927     11,234     10,513     10,816     10,730      9,623     11,049     10,586
Income before income taxes     15,209     15,076     14,571     14,539     13,961     13,473     13,578     13,150
Applicable income taxes         4,559      4,592      4,422      4,404      4,188      3,971      4,131      3,909
Net income                 $   10,650 $   10,484 $   10,149 $   10,135 $    9,773 $    9,502 $    9,447 $    9,241
Per Share Data1
Net income-Diluted          $    0.39  $    0.38  $    0.37  $    0.37  $    0.35  $    0.34  $    0.34  $    0.33
Dividends declared               0.20       0.19       0.19       0.18       0.18       0.17       0.17       0.15
Book value                       8.88       8.96       9.13       9.02       9.38       9.11       9.03       9.06
Average Balance Sheet Totals
Total assets               $2,194,619 $2,148,108 $2,093,615 $2,042,623 $2,048,886 $2,003,268 $1,980,861 $1,946,261
Securities                    594,391    602,717    583,256    573,108    540,872    539,118    528,492    516,558
Net loans                   1,448,496  1,404,516  1,379,703  1,342,657  1,327,705  1,297,881  1,278,235  1,261,066
Total deposits              1,425,049  1,407,878  1,390,027  1,366,708  1,368,104  1,330,045  1,316,782  1,292,547
Securities sold under
  repurchase agreements       112,403    147,688    164,525    129,010    141,065    162,655    209,176    171,371
Other liabilities             409,087    344,542    288,651    289,297    280,921    258,007    199,712    222,603
Total shareholders' equity    248,080    248,000    250,412    257,608    258,796    252,561    255,191    259,740

1 Per share amounts have been restated to record the effect of a two-for-one
common stock split in the form of a 100% stock dividend distributed on
October 30, 1998.
</TABLE>

PAGE  55

